TaxTMI 
TaxTMI 
2023 (12) TMI 1474
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....rmation from the assessee. The AR of the assessee appeared before learned Assessing Officer from time to time and filed the requisite details. 4. During the course of assessment proceedings, learned Assessing Officer confronted the letter addressed by Shri Konda Laxmaiah to the ACIT, Circle 9(1) Hyderabad stating that the sale proceeds of agricultural land amounting to Rs.4,43,37,500/- were received through cheques and deposited in his Savings Bank Account and an amount of Rs.9,87,500/- was paid to the vendor Smt. Tahera Abida. An amount of Rs.1.00 crore was paid through cheque and the balance through cash on various dates as mentioned in the copies of the receipts given on the stamp paper. Learned Assessing Officer also confronted the affidavit given by Shri Fakruddin Alias Arif confirming cash and cheque payment of Rs.4,28,16,500/- by Shri Konda Laxmaiah to Shri Shaik Fakruddin alias Arif, the GPA holder of the assessee. Accordingly, learned Assessing Officer asked the assessee to explain as to why the amount of Rs.4,28,16,500/- should not be treated as income of the assessee and brought to tax. 5. Assessee replied that she has not received any such amount other than the am....
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.... thought. 3. Only and main advantage to the assessee was he was able to ensure that no major documentary evidence of receing the huge money by her. At the same time we cannot neglect the statements givnen by Sri. Srisailam and Sri. Konda Lakshmaiah and other circumstantial evidence like money credited in to the assessee's account from the accounts of Sri Srisailam and Sri Konda lakshmaiah even after the sale deeds executed with them. 4. As requested by the assessee to cross examine Sri. Srisailam and Sri. Konda Lakshmaih, the AR was asked to bring the assessee and Sri. Srisailam and Sri. Konda Laksmaiah also informed to appear on 31/03/2015 for cross examination with Smt. Tahera Abeda. However, only Srisailam appeared on 31/03/2015 but Smt. Tahera Abeda was failed to appeal. If the version as depicted by the assessee is correct, she should have appeared for cross examination to find out the truth. The assessee has also not appeared against the summons issued to her in the month of November. 5. Further more, the claim of the assessee the land sold by her was agricultural land was not correct because the AR was asked to furnish the documents and certifi....
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.... final buyer i.e. M/s Maytas Hill County Developers Limited, has bought for the purpose of only for real estate development. ● The assessee was also not able to prove that the land in question is beyond 8 kms from the nearest ubmit ality or any town panchayat with more than 10000 population. ● The consideration received of Rs. 4,43,37,500 for Acres 9-35 Guntas is also very high for any agricultural land to get that much price. ● With regard to holding of the land, the assessee has bought the land in July, 2001 and entered into sale agreement with Srisailam for Rs.39,50,000 per acre and the same was executed as sale deed in the name of Sri. Konda Lakshmaiah and Finally the land was sold M/s Maytas Hill county Developers Private Limited. Further more, the assessee is not farmer to buy the land for cultivation. The assessee went to UAE more than 20 years back and doing business in UAE. All these shows that the assessee has not carried out any agricultural operations on the above land. Hence the claim of the assessee that the land sold was agriculture in nature is not correct. Based on the above discussion and in view of the decision of t....
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....at in the present case, the mandatory conditions for assuming jurisdiction u/s 147 r.w. section 148 of the Income Tax Act 1961(the Act') were not satisfied and therefore, the order of the Ld. CIT (A) upholding the initiation of reassessment proceedings is unsustainable both in law and on facts. 3. The Ld. CIT(A) failed to appreciate that there is no reason to believe, or that the alleged reason to believe is not relevant for the formation of the belief that income chargeable to tax as escaped assessment. Therefore, the order of the CIT(A) confirming the initiation of the reassessment proceedings is bad in law and to be quashed. 4. The Ld. CIT (A) erred in holding that learned Assessing Officer (the AO') independently applied his mind and arrived at satisfaction without appreciating the fact: a) That the assessment was reopened solely based on the statement of Sri. K. Konda Laxmaiah furnished by the Investigation Wing which was a mere statement without any proof which fact also was communicated by the Investigation Wing; and b) That the Appellant has not filed her return of income for the subject AY which is also a wrong fact. Thu....
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....er sources. 12. The action of the Ld. CIT(A)in assessing an amount of Rs 2,78,17,400 under the head "income from other sources" amounts to discovery of a new source of income which is not within the scope of powers of the CIT(A). Therefore, the order is unsustainable in law and to be quashed. 13.Without prejudice to the above grounds, the Ld. CIT(A) erred in changing the head of income without providing an opportunity to the Appellant for its rebuttal is in violation of principles of natural justice and fair play. Therefore, the order passed is void ab into and must be annulled. 14.Without prejudice to the ground no 10 to 13, the Ld. CIT(A) completely ignored the statement to Shri Fakruddin alias Arif recorded under section 131 of the Act on 27.03.015 completely denying that he is neither the GPA holder of the Appellant and nor as he received the alleged consideration of Rs.3,94,37,500 from Sri. Laxmaiah on behalf of the Appellant. Further he has also denied the signature on the receipt. Thus, to tax the Appellant on the alleged consideration received by Shri Fakruddin without further investigation is against the principles of natural justice and fair pla....
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....e said decision ruling where reopening of assessment u/s. 147 was held to be valid despite the AO not passing speaking order against objections filed by the assessee. The sum and substance of the matter is that no prejudice is caused to the appellant on account of delay in furnishing the reasons. 12. Referring to the decision of the Hon'ble Bombay High Court in the case of CIT vs. Videsh Sanchar Nigam Ltd reported in (2012) 340 ITR 66 (Bom.) and the decision in the case of CIT vs. trend Electronics (2015) 379 ITR 456 (Bom) and various other decisions filed in the paper book, learned AR submitted that when the reasons were not supplied to the assessee before completion of the assessment or when there is inordinate delay in supply of the reasons despite asking for the same, such re-assessement proceedings are invalid in the eyes of law. 13. Learned AR further submitted that the reasons for reopening of the assessment is based on wrong appreciation of facts. Referring to the Paper Book filed, learned AR submitted that the assessee has filed her original return of income on 1.08.2008. The assessee filed revised return of income on 27.02.2009 which was processed u/s 143(1) of ....
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....ture of transaction and thus formed the belief that there is income that has escaped the assessment in the hands of the assessee for which the case was reopened. So far as the argument of learned AR that the inordinate delay in furnishing the reasons for reopening of the assessment makes the reopening invalid is concerned, she submitted that the assessee has been furnished with the reason for reopening of assessment/reasons for issue of notice u/s 148. She submitted that mere delay in submission of the reasons does not vitiate the proceedings. Further, the assessee furnished the information as called for by learned Assessing Officer from time to time during the course of assessement proceedings and has never filed any objection as to why such information was called for. Therefore, the argument of learned AR that delay in furnishing of reasons vitiates the reopening of the assessment is not correct. 17. So far as the argument of learned AR that reopening was based on wrong facts that the assessee has not filed her return of income whereas the assessee has filed such return of income is concerned, the learned DR submitted that escapment of income is proved and is in fact brought o....
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.... Under these circumstances first of all we have to see as to whether such delay in furnishing of the reasons makes the re-opening invalid or not. We find the Hon'ble Bombay High Court in the case of CIT vs. Videsh Sanchar Nigam Ltd reported in 340 ITR 66 has observed as under: "The finding of fact recorded by the Income-tax Appellate Tribunal is that in the present case the reasons recorded for reopening of the assessment though repeatedly asked by the assessee were furnished only after completion of the assessment. The Tribunal following the judgment of this Court in the case of CIT v. Fomento Resorts and Hotels Ltd., has held that though the reopening of the assessment is within three years from the end of the relevant assessment year, since the reasons recorded for reopening of the assessment were not furnished to the assessee till the completion of assessment, the reassessment order cannot be upheld. Moreover, special leave petition filed by the Revenue against the decision of this Court in the case of CIT vs. Fomento Resorts and hotels Ltd has been dismissed by the Apex Court, vide order dated July, 16, 2007. In this view of the matter, the present appeal....
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....d the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions relied by ld. Counsel for the assessee. We find, the assessee, in the instant case, had filed the original return of income on 31.10.2006 declaring the total income at Rs.10,87,058/- which was processed accordingly. We find, the AO reopened the assessment on the ground that the assessee has purchased residential property amounting to Rs.31,50,000/- and the same is not verifiable from the return of income filed for the AY 2006-07 and the assessee has not furnished the return of income. The reasons of such reopening has already been reproduced in the preceding paragraph. From the above, it is clear that the reopening was made on the ground that the assessee has not filed the return of income and, therefore, the income to the extent of Rs.31,50,000/- has escaped assessment. Since the assessee has already filed the return of income, a fact brought on record by the AO himself in the body of the assessement order itself, therefore, the very reason for which the case of the assessee was reopened is factu....
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.... is bad and nonest in the eye of law. 25. Thus, viewing from any angle, we are of the considered opinion that the assessment order is not legally sustainable. We, therefore, quash the reassessment proceedings initiated by learned Assessing Officer. Since the assessee succeeds on the legal ground of validity of re-assessement proceedings the other grounds challenging the addition on merit, being academic in nature, are not adjudicated. 26. In the result, appeal filed by the assessee is allowed. Order pronounced in the Open Court on 29th December, 2023. ============= Document 1 Office of the Deputy Director of Income-tax (IT)-2; Hyderabad Date: 30.03.2015 N F.No. DDIT(IT)-II/U/s 147/2010-11/PAN:AEEPG1482L To Smt. Tahera Abeda, -R/o. 16-2-40, Akbar Bagh, Hyderabad. Madam, Sub: Income tax assessment. in the case of Smt. Tahera Abeda, Hyderabad - Communication of reasons for reopening - A.Y. 2008-09 - Regardingla Please refer to the above. As requested, the reasons for reopening the assessment for the asst. year 2008-09 are communicated as under :- 2. "Information was received from the DDIT(Inv), Unit-II(1), Hyderabad that one Konda Lakshmaiah....